During the year, Sloan Inc. began a project to construct new corporate headquarters. Sloan purchased land with an existing building for $750,000. The land was valued at $700,000 and the building at $50,000. Sloan planned to demolish the building and construct a new office building on the site.

1.	Classify as land and do not depreciate.
2.	Classify as building and depreciate.
3.	Expense.
4.	Capitalized
5.	Expensed as a period cost

Purchase of land for $700,000

Interest of $147,000 on construction financing incurred after completion of construction

Interest of $186,000 on construction financing paid during construction

Purchase of building for $50,000

$18,500 payment of delinquent real estate taxes assumed by Sloan on purchase

$12,000 liability insurance premium during the construction period

$65,000 cost of razing existing building

Moving costs of $136,000

Freight-in charges paid for goods held for resale

In-transit insurance on goods held for resale purchased F.O.B. shipping point

Interest on note payable for goods held for resale

Installation of equipment

Testing of newly purchased equipment

Cost of current year service contract on equipment